Ohhh, even more fun for the housing market.

I don't see this one backfiring.  Today I hear a commercial on the radio for Ivory Homes.  It starts with a man saying "I want to get into an Ivory home, but I am upside down in my house, do you have some way of helping this?"  Apparently Ivory Homes does, they have this new program called the Guaranteed Lease where they guarantee to rent your home if you buy one of their homes, even if there is no tenant in your house they will pay the payment.  They take care of all of the maintenance, repairs and utilities.  All this will be taken care of for the next three years, do you get that, three years.  The announcer states that now you can get into a new home and then sell your home when the market rebounds.  Am I the only one that foresees the potential this has for disaster? Three years from now what is going to happen? 

The best scenario for this is that the housing market rebounds and in 2 1/2 years most people think ahead and sell their homes before the three year lease is up.  I am sure that out of the people that buy the house there will be a percentage of them that don't think about it until after the three years is up, and scramble to get the house on the market   Then there is the small percentage that will find themselves two months behind in mortgage because they completely forgot about it, and there will be a few houses that end up in foreclosure.

The worst scenario.  The housing market doesn't rebound enough in the three years and all of a sudden the people who have made use of this program find themselves responsible for two mortgages, finding a renter, worrying about repairs, etc.  A small percentage will take a hit and sell the house for what they can get out of it.  Most of them will end up in foreclosure in the old house.  And the last few will end up in foreclosure in BOTH houses. 

The best part is Ivory homes walks away without a scratch.  They get the money for the houses they build, and the banks get stuck with the mortgages.  They will probably charge more for rent than the mortgage payments which will put them ahead for repairs they will have to make.

All of this will screw up the housing market ONCE AGAIN.  Yes I am cynical and see the worst, but life often deals the worst.  And if other builders catch on to this, like the last mortgage disaster, than this could be epidemic. 

Tell me what you think and what can we do about this?